GM files for Chapter 11 bankruptcy protection
General Motors goes for Chapter 11 bankruptcy protection in the biggest US industrial collapse in history
Car giant General Motors has filed for bankruptcy protection from its
creditors, representing the biggest failure of an industrial company in US
history.
The company has floundered in recent years after sales nosedived, but the
credit crunch has exacerbated the situation to such an extent the company has
been forced to file a Chapter 11 petition, ring-fencing itself from creditors.
The US government is now expected to take a 60% stake in the company,
bankrolling it to the tune of $30bn (£18.5bn) , while a sweeping restructuring
takes place.
GM will move forward with four core brands — Chevrolet, Cadillac, Buick and
GMC — and cut four others. The company plans to shed 21,000 staff, about 34
percent of its workforce.
GM has already been gifted $20bn of state aid since the end of last year, but
its bankruptcy filing revealed its debts of $173bn dwarfed the handout.
Further reading:
GM
expected to enter Chapter 11 bankruptcy